diff --git a/cookbooks/aws-parallelcluster-install/files/default/clusterstatusmgtd/clusterstatusmgtd.py b/cookbooks/aws-parallelcluster-install/files/default/clusterstatusmgtd/clusterstatusmgtd.py
index a9c1134251..786bbe3e89 100644
--- a/cookbooks/aws-parallelcluster-install/files/default/clusterstatusmgtd/clusterstatusmgtd.py
+++ b/cookbooks/aws-parallelcluster-install/files/default/clusterstatusmgtd/clusterstatusmgtd.py
@@ -323,6 +323,11 @@ def __init__(self, config):
         self._compute_fleet_data = {}
         self.set_config(config)
 
+    class ClusterStatusUpdateEventError(Exception):
+        """Raised when there is a failure in updating the status due to an error on event handler execution."""
+
+        pass
+
     def set_config(self, config):  # noqa: D102
         if self._config != config:
             log.info("Applying new clusterstatusmgtd config: %s", config)
@@ -366,7 +371,7 @@ def _call_update_event(self):
             _write_json_to_file(self._config.computefleet_status_path, compute_fleet_data)
         except Exception as e:
             log.error("Update event handler failed during fleet status translation: %s", e)
-            raise
+            raise ClusterStatusManager.ClusterStatusUpdateEventError
 
         cinc_log_file = "/var/log/chef-client.log"
         log.info("Calling update event handler, log can be found at %s", cinc_log_file)
@@ -386,7 +391,7 @@ def _call_update_event(self):
             _run_command(cmd, self._config.update_event_timeout_minutes)
         except Exception:
             log.error("Update event handler failed. Check log file %s", cinc_log_file)
-            raise
+            raise ClusterStatusManager.ClusterStatusUpdateEventError
 
     def _update_status(self, request_status, in_progress_status, final_status):
         if self._compute_fleet_status == request_status:
diff --git a/test/unit/clusterstatusmgtd/test_clusterstatusmgtd.py b/test/unit/clusterstatusmgtd/test_clusterstatusmgtd.py
index 15852d0344..ca59e60e6e 100644
--- a/test/unit/clusterstatusmgtd/test_clusterstatusmgtd.py
+++ b/test/unit/clusterstatusmgtd/test_clusterstatusmgtd.py
@@ -137,7 +137,7 @@ def test_get_status(self, compute_fleet_status_manager, get_item_response, expec
         """Test get_status method."""
         if get_item_response is Exception:
             compute_fleet_status_manager._table.get_item.side_effect = get_item_response
-            with pytest.raises(Exception):
+            with pytest.raises(ClusterStatusManager.ClusterStatusUpdateEventError):
                 compute_fleet_status_manager.get_status()
         else:
             compute_fleet_status_manager._table.get_item.return_value = get_item_response
@@ -398,7 +398,7 @@ def test_call_update_event(self, mocker, status, translated_status, exception):
         run_command_mock = mocker.patch("clusterstatusmgtd._run_command")
         if isinstance(exception, Exception):
             run_command_mock.side_effect = exception
-            with pytest.raises(Exception):
+            with pytest.raises(ClusterStatusManager.ClusterStatusUpdateEventError):
                 clusterstatus_manager._call_update_event()
         else:
             file_writer_mock = mocker.mock_open()
diff --git a/test/unit/slurm/test_fleet_config_generator.py b/test/unit/slurm/test_fleet_config_generator.py
index ade2e41bda..ddeb494d49 100644
--- a/test/unit/slurm/test_fleet_config_generator.py
+++ b/test/unit/slurm/test_fleet_config_generator.py
@@ -187,7 +187,7 @@ def test_generate_fleet_config_file_error_cases(mocker, tmpdir, cluster_config,
     output_file = f"{tmpdir}/fleet-config.json"
 
     if expected_message:
-        with pytest.raises(Exception, match=expected_message):
+        with pytest.raises(CriticalError, match=expected_message):
             generate_fleet_config_file(output_file, input_file="fake")
     else:
         generate_fleet_config_file(output_file, input_file="fake")